One reason behind the cancellations that Sega blames is the economic downturn and lowered profit opportunities in the publisher’s European division. To offset the losses, Sega plans to restructure the European side of its business by “implementing the reduction of various fixed expenses,” which sounds like layoffs could be coming.
“The environment surrounding the consumer area has been rapidly changing, including reactionary decline from the stay-at-home demand in COVID-19 and the economic downturn due to inflation in the European region, and profitability has been lowered mainly in European bases,” Sega said.
The publisher’s parent company has warned investors in a notice to expect a record loss of 14.3 billion yen ($95.8 million USD) this financial year ending on March 31st, 2024 and says the restructuring includes cancelling titles to reduce fixed expenses and reviewing in-development games. For Creative Assembly, the move comes out of left field; Hyenas’ development studio expected the game to enter the final stages of development with its most recent opportunity to get it into the hands of the players at Gamescom and the most recent beta.
Now, while the cancellation was all the developers were told by Sega today, a dark cloud of possible massive studio layoffs and redundancy is looming over Creative Assembly’s workforce, according to a source close to the situation via IGN’s reporting. Before the cancellation, Sega had commented that Hyenas was a “challenging title” but was “striving to improve its quality” by making “final adjustments to its business model.” According to VGC, it sounded like the Yakuza publisher wanted to shift the game to a free-to-play model to get more profitability out of the title that Creative Assembly initially ruled out.